P × (I - 5500 N)
P stands for percent that is taken away as the tax. I stands for the income. N stands for the number of persons per household.
Since it would be foolish to just randomly pick a number without accurate research and statistics, an undefined variable stands for percent of taxable income. A number could be plugged in for P to compensate for a balanced budget. Here is the tricky part: from your total income, you subtract $5500 for each person in your household, up to four people.
By subtracting $5500 for each person of the household, you assure that you do not tax the poor disproportionably so much so that working people are living in poverty. The only exception to this system would be that N could not be more than four. This way, a household of five would not have to pay less taxes on account of their advanced fertility. It's $5500 not because that's my favorite number but because it stands for approximately $15 per person × 365 days per year (actually $5475). Surely we should not tax the bare minimum (I would say $15 is a good estimate but accurate stats should be gathered to find such a minimum) for existing. This would mean that a family of four would not be taxed until they reach over $22000 (4 × $5500).
For now, let's assume the tax rate to make the personal income tax give its "fair share" for a balanced budget is 20%.
A household of four with a yearly income of $20000.
P × (I - 5500 N)
.20 × (20000 - 22000)
.20 × (0) = 0
Tax to be paid: $0.
Analysis: A household receiving less income than $15 daily per person will not be taxed.
A household of six with a yearly income of $45000.
P × (I - 5500 N)
.20 × (45000 - 22000)
.20 × (45000 - 22000) = 4600
Tax to be paid: $4600.
Analysis: A household with more than four people will only get the maximum four people deductible.
A household of four with a yearly income of $1000000.
P × (I - 5500 N)
.20 × (1000000 - 22000)
.20 × (1000000 - 22000) = 195600
Tax to be paid: $195600.
Analysis: A wealthy household would pay a bigger slice of the tax, but still have
considerably more left over than a poor family.
The 20% tax rate in the examples is made up. The percent of tax rate would be adjusted on basis of needed taxes. If the current tax rate of X is not enough, add a percent (or fraction of a percent) to obtain more money. The $15 per person daily minimum requirement is also made up, however I don't see how a trillion-dollar economy needs to tax the "last" $15 someone has. However, that minimum requirement could also change. However, if those two figures could be adjusted (with accurate stats it could be done in a matter of hours), then we could have a tax system that would be the most democratic to all. Only the paper and the time we could save should be enough to motivate us to change. And no, I am not available for higher offices as losing takes its toll on you.
